Ministry warns about inefficiency at State-owned Licogi

HÀ NỘI — The Ministry of Finance has urged measures to improve the efficiency of State capital at the Construction and Infrastructure Development Corporation (Licogi).

The finance ministry’s report said that the company was operating inefficiently with revenues declining significantly in the past two years.

Statistics showed that Licogi reported revenue of more than VNĐ2.7 trillion (US$115 million) in 2017, a drop of seven per cent against 2016, largely blamed on its real estate business. It reported losses of VNĐ58.7 billion.

In the first six months of 2018, revenue reached VNĐ1.3 trillion, 35 per cent lower than the same period of 2017. It reported a modest sum of pre-tax profit of VNĐ9.8 billion in the period.

Licogi’s return on assets was low, at 0.08 per cent.

The finance ministry said that Licogi failed to preserve the value of State capital, urging the Ministry of Construction who was previously in charge of managing State capital at Licogi to report causes for loss-making results and raise solutions to improve the company’s operation.

Licogi was also found to have struggled in paying debts because its short-term assets were mainly receivables and inventories which accounted for more than 90 per cent. As of the end of 2017, its short-term debt total exceeded its short-term assets by VNĐ1.2 trillion.

As the solvency of Licogi was heavily dependent on inventories and receivables, the finance ministry said that it was necessary to speed up reducing inventories and collecting receivables.

The Ministry of Construction in December transferred the State capital ownership representative rights to the State Capital Investment Corporation (SCIC). Accordingly, more than 36.6 million shares of Licogi, or 40.7 per cent of Licogi’s charter capital, were handed over to the SCIC. — VNS